Feds are currently amidst a two-year pay freeze with continued raises for within-grade step increases.

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A senior administration official told The Washington Post, which first reported the story, that “a permanent pay freeze is not an acceptable policy.” But added, “While modest, a 0.5 percent increase reflects the belt-tightening we must do in these difficult times.”

The average federal salary is about $76, 586, according to OPM statistics(page 48). At that rate, the pay raise would provide an extra $383 dollars a year.

The proposed increase also does not keep pace with inflation.

This year, the cost-of-living adjustment for Social Security recipients was 3.6 percent, starting in 2012. The COLA is based on increases to the Consumer Price Index.

A few federal unions said they were pleased that the administration was lifting the freeze but disappointed in the amount.

“Although we would have preferred a larger increase as prescribed by law, it is nonetheless a welcome development that the magnitude of federal employees’ sacrifice in recent years is being acknowledged,” said William R. Dougan, president of the National Federation of Federal Employees. “In the face of continued attacks on federal workers from Republicans in Congress and conservative pundits in the media, this comes as a breath of fresh air for all those who serve their country every day.”

Colleen Kelley, president of the National Treasury Employees Union, said a pay raise “reflective of private sector increases would have been more fair and appropriate,” according to a statement.

The 0.5 percent proposed increase would be “wiped out” by higher costs for health care, food and other necessities, said John Gage, president of the American Federation of Government Employees, in a statement.

Carol Bonosaro, president of the Senior Executives Association, told Federal News Radio the proposal was “pretty minimal,” but added, “These days, given the economic and political atmosphere, it’s certainly welcome.”